Offering stock options to gauge managerial talent
成果类型：
Article
署名作者：
Arya, A; Mittendorf, B
署名单位：
University System of Ohio; Ohio State University; Yale University
刊物名称：
JOURNAL OF ACCOUNTING & ECONOMICS
ISSN/ISSBN：
0165-4101
DOI：
10.1016/j.jacceco.2005.02.001
发表日期：
2005
关键词：
摘要：
Besides the commonly cited reasons for the use of stock options, including motivating employees, conserving cash, exploiting favorable accounting and tax treatment, and retaining managers, we demonstrate a complementary benefit of option-based compensation: options also prove efficient in matching managerial pay to ability. Options are useful because they force a manager to put his pay on the line. If a manager wants to overstate his worth to the firm, he must naturally also overstate the firm's worth with him at the helm. As a result, the firm offers a generous package of stock options in lieu of cash for assertions of high ability. Since both the likelihood of option exercise and firm value in the event of exercise are tied to managerial ability, only a gifted manager takes such a gamble. (c) 2005 Elsevier B.V. All rights reserved.
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